The Next Move For Etsy Investors After The Stock's Recent Outperformance

Shares of Etsy Inc ETSY have surged 58 percent since July 1, versus a mere 4 percent gain in the S&P.

“[Despite this recent outperformance], we believe there is still room for numbers to improve and, therefore, think the stock continues to work,” Citi’s Mark Kelley said in a report. He maintained a Buy rating on the company, while raising the price target from $16 to $20.

Neither the acquisition of Blackbird Technologies nor the new partnership with Intuit Inc. INTU has impacted Etsy’s shares, Kelley mentioned.

Blackbird Acquisition

On September 19, Etsy acquired Blackbird Technologies, with an aim to enhance its search capabilities. Engagement at Etsy’s Exploratory Search rise ~10 percent, while Blackbird claims to have witnessed a 10-20 percent conversion improvement on its website. Kelley expects the acquisition to boost conversion at Etsy.

Intuit Partnership

“Etsy now offers a discounted rate on QuickBooks Self-Employed (U.S. and U.K.), which is immaterial at this point, but is a clear indication that the company continues to look for ways to ease seller paint points,” the analyst wrote.

The EPS estimates for 2016, 2017 and 2018 have been raised from $0.06 to $0.08, from $0.17 to $0.30 and from $0.37 to $0.50, respectively.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!